Business ethics from a UK cultural perspective
Along with the areas of progress in the global business environment, there has also been a rise in a multitude of ethical issues. Today, with growing awareness and complex business relationships, it is vital for each business to create codes of conduct and ethics that must be followed by each member of the organisation to reach its desired goals. The fundamental and basic ethical issues are about trust and integrity. However, for a business, there are also complex issues such as decision-making, accommodating diversity, governance, and compliance.
Let’s take a look at the ethical issues that a business needs to address.
- Fundamental ethical issues
The most essential issues that a business must face are trust and integrity. These factors contribute largely to the functioning and success of an organisation. The basic concept of integrity is to conduct the business in the most committed and honest way possible. It involves treating the end-user impartially. To successfully run a business, it is absolutely necessary to keep the consumers’ faith. If a business conducts its affairs honestly, and with an unwavering commitment towards ethical practices, it can create a very high level of trust in the market. It is the perception of the consumer, and the relationship with them, that leads to the success or failure of a business. Focusing on such fundamental ethics therefore becomes a priority.
- Governance and compliance
It is vital for all businesses to comply with safety regulations, environmental laws, civil rights laws, financial statutes, laws of the country related to a business, and much more. This leads a business to build its business conduct policies (which the entire organisation must follow), and to create regulations to address Governance and compliance issues within the organisation.
- Diversity in the workplace
There is a saying by Stephen Richards Covey, “Strength lies in differences, not in similarities”. This difference in character, capability, strengths and capacity create a diversity. This diversity in people is a strength that can be optimally utilised by a business to succeed. The most ethical reaction to diversity must be to enforce equal opportunity. This enables the organisation to value every employee’s contribution while letting them enjoy a mutually respectful workplace. Maximising the value of contribution made by each employee, no matter what capacity, is the first step to success for a business.
- Decision-making ethics
- Decision-making ethics
A very useful method to explore and address ethical issues while identifying a fair course of action can be found in the following decision-making framework:
Recognise issue -> collect the facts -> evaluate alternative response to such issue -> make a decision -> test it -> implement.
The decision-making process for all ethical issues must consider protecting the employee, and also consumer rights, while ensuring fair and unquestionable business operations. Ethical decision-making must also consider protecting the common good, and beliefs and values of all employees.
The general standards of a society shape the business behaviour of a business in that society. This creates an invisible enforcement of best practices in the business community. This is the reason why, today, it is very important to consider business ethics and standards while running a business. However, the issues a business may face while creating a cross-cultural, effective standards and corporate values are a serious concern.
(1) Strengths, Weaknesses, Opportunities and Threats
A business can confront such issues by determining the Weaknesses and Strengths of the relevant ethics, the Threats that create a road block and the Opportunities that are available.
Business ethics have gained immense exposure given the fact that the new century has seen a rising awareness in society of the need for ethical and morally responsible business practices. The various incidents of money laundering and insider trading forced Governments to impose laws on such corporations so that they adopt ethical practices.
At present, global organisations, both public and private, have shifted their focus on ethical issues, mostly in the arena of corruption. Also, increased awareness in the field of stakeholder relations encourages healthy business practices. Organisations have realised the impact of decisions that are beyond their control and could hurt their reputation. Today, ethical issues have increased in importance across the world. Multinational companies are now trying their best to avoid moral conflicts at any cost.
There are many businesses that do not see any point in laying down an ethical code of conduct in their organisations. The Chairman of a large UK corporation stated “We have no written code of ethics…I subscribe to the philosophy that integrity and fair and proper business conduct are fundamental.” This ideology stands true, although, practically speaking, such philosophy has its own weakness. No matter how a leader thinks, unless such thoughts are put down in paper and made mandatory, some employees may stray.
Another area of concern is the lack of consideration offered by small- and medium-sized businesses to ethical issues. Though such businesses behave similarly and face identical issues, not much attention has been bestowed upon the ethical functioning of these organisations, despite being the providers of the majority of jobs in any economy.
Again, most businesses include terms of value such as trust, fairness, and integrity in their mission statements and reports. However, these codes are not universally accepted, and it is seen that business leaders and higher management deliberately avoid discussion and confrontations on such matters in practice, so they are viewed as cosmetic with no substance. This is a major reason why initiatives, such as Ceres Principles, Sullivan Global Principles, and Caux Round Table business principles, are trying to establish fundamental values in both national and international businesses.
Wider education and availability of free information have created immense awareness among consumers of ethical issues. Shareholders and Government demand transparency and accountability in the functioning of a business. Due to the various high profile unethical incidents being uncovered across the globe, it is expected that society at large will increase its demand for transparency. Furthermore, campaigning groups are delving deeper, and raising concerns with businesses that need immediate attention too.
The opportunities of such business ethics lie in the readiness of businesses to adopt socially responsible programs that can sustain a respectable relation with their shareholders and consumers.
The major threat to any business is the lack of integration in their ethical corporate policies. Apart from a handful of corporations, most businesses take inadequate efforts to reach out to employees about business dilemmas and how they can contribute through moral initiatives. A business must offer sessions and guidance to their employees to help them recognise the difference between wrong and right business behaviour.
A general lack of ethical training in business is responsible for low moral standards in business. The lack of efficient trainers and qualified instructors poses a threat to the long-term sustainability of ethical business practices. A business can include ethics-awareness elements in induction sessions and in all new employee training programs to handle such matters.
(2) Ethics programmes
When a business intends to implement a set of values that plant ideas of desirable, acceptable and responsible business behaviour, it must bring to bear appropriate policies, processes, and tools apart from a well-charted ethics programme to guide employees towards the required work methods and culture. The major elements of an ideal ethical programme must be based on the following framework:
Ethical Values leading to Ethical Policies
Code of ethics
Communication and awareness drives
Culture and supporting context
Training and reinforcement
Accountability and monitoring
(3) How to implement an ethics programme
- Provide employee guidance
- Guard company reputation
- Create a consistent company culture
- Secure shareholder value
- Reduce operational risks
- Decrease company liability in case of any incidence of misconduct
How does an organisation monitor effectivity of ethical training?
- By monitoring the use of hotlines
- By performing an internal audit
- By collecting reports
- By recording the number of employees receiving such training
- By conducting staff surveys
- By engaging with external stakeholders
- By implementing provision for external assurance
(4) What are the major ethical dilemmas faced by UK organisations?
- Corruption, bribery and facilitation payments
- Safety and security issues
- Environmental impacts due to business functioning
- Information security problems
- Human rights issues
- Supply chain management issues
Findings from UK Corporations
- Increased investment in ethics programmes
- Board of Directors takes ultimate responsibility for ethical policies and programmes
- Speak up mechanism implemented to enable employees to raise ethical concerns with due privacy
- Monitoring ethical behaviour is on the rise
- Very limited number of companies offer ethics training as a routine procedure
- Bribery, facilitation payments, and corruption are the ethical issues faced by most corporations
The subject of ethical business and business ethics is being discussed widely in the UK, Europe and around the world. To successfully implement business ethics, a business must build on its strengths, work on its weaknesses, capitalise on its strengths, and combat all threats existing within the organisation.
International Business Ethics Institute, IBE, 2001, International Business Ethics Review, A Publication of the International Business Ethics Institute, Volume 4, Issue 1